THE DENIALS CHALLENGE - Becker's Hospital Review HC...THE DENIALS CHALLENGE PROPRIETARY &...

PROPRIETARY & CONFIDENTIAL

A Cross-functional Approach to Denial Prevention and Management

October 2017

THE DENIALS CHALLENGE

PROPRIETARY & CONFIDENTIAL 2

Rick Childs, FHFMA,

Vice President,

Revenue Cycle

Management, Floyd

Medical Center

Presenters

Tony Rinkenberger,

Director of Revenue

Cycle, Ridgeview

Medical Center and

Clinics

Carmen Sessoms,

FHFMA, Associate

Vice President, RCM

Advisory Services

Program, Change

Healthcare

3PROPRIETARY & CONFIDENTIAL

The Impact of DenialsCarmen Sessoms, Associate Vice President, RCM Advisory

Services Program, Change Healthcare


Denials: An obstacle to timely and complete

reimbursement


Denial rates by region

Alaska

Hawaii

PR

VI

Pacific 10.89%

South Central 10.5%

Mid-West 10.32%

Southeast 9.33%

Southern Plains 8.6%

Northeast 8.3%

Mountain 6.99%

Northern Plains 6.64%


Denial causes

Front-End

Front-End/Mid-Cycle

Mid-Cycle

Back-End

Denial causes span the entire revenue cycle,

although the largest percentage are associated

with front-end processes.


Appealing denials is costly


The Change Healthcare denials and appeals data was culled from a

sample of more than 3.3 billion hospital transactions valued at $1.8

trillion.

Change Healthcare analysts used primary institutional inpatient and

outpatient claims processed by Change Healthcare in 2016, and the

average charged amount and first denied amount for the 724 hospitals

included in the claims sample.

The total claimed charges and denied amounts for the nation’s 5,683

hospitals was then extrapolated from this sample data. An appeal

success rate of 63%1 and average reimbursement rate of 29%2 were

used to calculate the amount denied. The $118 per claim average

appeal cost is based on Change Healthcare statistical averages for

hospital customers.

The data used for the analysis is based on internal Change Healthcare

data, and may or may not be representative.

Source of denials and appeals data

1 Based on Change Healthcare statistical averages for hospital customers.2 Based on Change Healthcare Pulse Revenue Cycle Benchmarking™ national average reimbursement rate.


Seven Denial Prevention

Strategies


HIM

An analytics-driven revenue cycle enables a cross-

functional approach to denial prevention

Patient access Billing / collection

Analysis and use of data


Where are denials originating? • Patient Access and Registration

• Insufficient Documentation

• Coding/Billing Errors

• Payer Behavior

• Utilization/Case Management

• Which has the greatest impact?• A certain physician

• A particular service line

• A specific payer

• A certain type of code

• A process redesign

The first steps in denials prevention - analysis

Root Cause

Determination

Prioritization

1.

2.

Do you have this data? Is it accessible in a timely manner? Do you trust it?


Denial Reason National

Registration/Eligibility 23.9%

Missing or invalid claim data

14.6%

Authorization/pre-certification

12.4%

Medical documentation requested

10.8%

Service not covered 10.1%

Medical coding 5.8%

Medical necessity 5.8%

Untimely filing 3.7%

Appropriateness of care 3.4%

Do you check it consistently?

How often do you check it?

• At scheduling

• Three days before elective services

• Day of service

• During stay (interim billing)

• Before submitting claim

If not eligible/covered, what is your process to inform patient of financial responsibility and other options?

3. Prevention strategy-eligibility


Denial Reason National



14.6%


12.4%


10.8%


Medical coding 5.8%




How are you alerted to potential data

quality issues?

Are you applying business rules to

examine registration data to help ensure

it’s accurate, complete and consistent?

Are there workflows in place to correct

errors in real-time?

4. Prevention strategy – registration data quality


Do you know the real reason your

claims are denied for authorization?

• Was it obtained?

• Was it expired?

• Was it for the wrong procedure?

• Was the auth number not on the claim?

Do you have the appropriate medical

necessity business rules informing your

process?

5. Prevention strategy – prior authorization and medical

necessity Denial Reason National



14.6%


12.4%


10.8%


Medical coding 5.8%





Secure Authorization

Identify Changes to Scheduled Procedures

▪ Ordered vs. performed

▪ Revised authorizations

Insurance Plan Changes

▪ Real-time eligibility

▪ Exchanges and unpaid premiums can lead to denials

▪ Coverage change with plan year changes

Denial prevention starts in patient access


▪ Scheduling

▪ Require insurance, appropriate codes and authorization

▪ Medical necessity

▪ Record all calls and electronically capture digital image of authorizations from payer website

▪ Authorization Team

▪ Verify payers authorization requirements and correct authorization (obtains auth for physician offices)


Denials prevention starts in patient access


▪ Pre-registration

▪ Verify insurance eligibility and benefits, IP only and outpatient codes

▪ Document in ADT


▪ Registration – Walk in, Direct Admits and STATS

▪ Verify insurance eligibility and benefits

▪ Medical necessity

▪ Notify authorization team when needed

Denials prevention starts in patient access


UR/Case Management

▪ Updating clinical data for continued stay approvals

▪ Involve Medical Director when peer-to-peer is needed

▪ Validate medical necessity

CDI Team

▪ Educate physicians on documentation issues that lead to denials.

Denial prevention continues in mid-cycle


…

$796,471$791,065

$-

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000

PARAGON - Point of Service Collections 2015 2016

2017 Goal

Note: Goal based on 2011 KPIs.

Analysis drives targeted education to help prevent

denials


Eligibility verification improvement and stabilization


Registration quality improvement and stabilization


6. Prevention (and management) strategies – effective

claims process

Strong Edits

Claim Visibility

Appeal Denied Claims

To help submit

clean claims

To enable proactive

issue resolution

To help recover

potential revenue

Copyright 2017 Change Healthcare Operations LLC and/or one of its subsidiaries and affiliates. All Rights Reserved.


7. The last step, same as first…ongoing analysis across

the revenue cycle

Payer Relations

Reimbursement

Denial Analysis

Billing Efficiencies

Services Rendered

Patient Access

+


Regularly seek facts and implement change

Implements change

Invests in skillsand technology

Seeks facts Seeks facts

Implementschange


Patient Financial Services

▪ Build edits in your host system and/or claims scrubber

▪ Tailor edits to the payer

Denials Team

▪ Involve the front-, middle- and back-end departments

▪ Track denials by payer, denial type, department, etc.

▪ Find the trends

▪ Focus on largest denials by volume and dollar

▪ Create focus groups with all departments involved to find and correct

the root cause of denials

Denial prevention in the claims process


Appealing denied claims

Concurrent and Retrospective Denials

▪ Denial reviewed by clinical nurse reviewer for appeal decision

▪ Acceptance of denial; bill payer for outpatient, ED and ancillary

services, as applicable

▪ Peer-to-peer (P2P) with payer for medical director or admitting

physician if available

▪ Non-acceptance of denial; written appeal per payers’ guidelines


▪ Appeal Process

▪ Education

▪ Detailed review of all denials by denial management team

▪ Provide education on steps to eliminate specific identified denials

▪ Meet with departments monthly to review denials for their department

and to collaborate on process improvements to eliminate denials.

Appealing denied claims


Managed Care

▪ Have your Managed

Care/Contract

department informed

of issues

▪ Have regular meetings

with payers on denial

issues

Denial prevention impacted by payer relationsPrimary Provider Name Speciality

Remit Adj. Denial Category

Remit Adj.

Group

Remit Adj.

CodeRemit Adj. Description Payer

Admission Type

Form –IP/OP

Patient Control #Auth # Total Denied Charges

AK

Physician Assistant/Nurse Practitioner Other CO A1

Claim/Service denied. At least one Remark Code must be provided (may be comprise

MINNESOTA MEDICAID

1500 –OP $231.00

GBGastroenterology

Medical Coding CO 59

Processed based on multiple or concurrent procedure rules. (For example multiple

MINNESOTA BLUE SHIELD

1500 –OP $260.27

AL

Physician Assistant/Nurse Practitioner

Medical Necessity CO 58

Treatment was deemed by the payer to have been rendered in an inappropriate or i

MINNESOTA MEDICARE

1500 –OP $78.00

AL


Registration / Eligibility CO 109

Claim/service not covered by this payer/contractor. You must send the claim/serv

MINNESOTA MEDICARE

1500 –OP $25.00

AL



Claim/service not covered by this payer/contractor. You must send the claim/serv

MINNESOTA MEDICARE

1500 –OP $271.00

SK

Behavioral / Mental Health Other CO 122 Psychiatric reduction.

MINNESOTA MEDICAID

1500 –OP $22.67

GBGastroenterology

Medical Coding CO 59


MINNESOTA MEDICARE

1500 –OP $185.10


Denial Category (hospital)

Percent Denied

Charges Denial Reason (clinic)

Percent Denied

Charges

Missing or Invalid Claim Data 31.1% Service not covered 21.9%

Other 24.1% Medical Coding 20.1%

Registration / Eligibility 19.6% Duplicate Claim / Service 19.0%

Service not covered 12.9% Registration / Eligibility 10.6%

Duplicate Claim / Service 4.9% Missing or Invalid Claim Data 9.4%

Medical Documentation Requested

4.3% Other 8.8%

Untimely Filing 1.5% Authorization / Pre-Certification 3.8%

Authorization / Pre-Certification

0.5%Medical Documentation Requested

2.2%

Medical Necessity 0.5% Untimely Filing 1.8%

Medical Coding 0.5% Medical Necessity 1.7%

Provider Eligibility 0.7%

Analysis of denial categories drives improvements


Primary Provider Name Speciality

Remit Adj. Denial Category

Remit Adj.

Group

Remit Adj.

Code Remit Adj. Description PayerAdmission Type

Form –IP/OP Patient Control # Auth #

Total Denied Charges

AK

Physician Assistant/Nurse Practitioner Other CO A1

Claim/Service denied. At least one Remark Code must be provided (may be comprise MINNESOTA MEDICAID

1500 –OP $231.00

GB GastroenterologyMedical Coding CO 59


MINNESOTA BLUE SHIELD

1500 –OP $260.27

AL


Medical Necessity CO 58

Treatment was deemed by the payer to have been rendered in an inappropriate or i MINNESOTA MEDICARE

1500 –OP $78.00

AL



Claim/service not covered by this payer/contractor. You must send the claim/serv MINNESOTA MEDICARE

1500 –OP $25.00

AL



Claim/service not covered by this payer/contractor. You must send the claim/serv MINNESOTA MEDICARE

1500 –OP $271.00

SKBehavioral / Mental Health Other CO 122 Psychiatric reduction. MINNESOTA MEDICAID

1500 –OP $22.67

GB GastroenterologyMedical Coding CO 59

Processed based on multiple or concurrent procedure rules. (For example multiple MINNESOTA MEDICARE

1500 –OP $185.10

Denial category report for physician and payer scoring


Denial Appeal Recovery Rate = 93%

Cross-functional improvements impact final result

Fewer

registration

errors

Fewer

denials

More effective

appeal process


Network

Technology and services can empower your

revenue cycle priorities

QUALITY OUTCOMES REVENUE PERFORMANCE OPERATIONAL EFFICIENCYENGAGEMENT & ACCESS

So

ftw

are

&

An

aly

tic

sSe

rvic

es

Pre-Service Service Post-Service

Pre-Auth &

Med Necessity

Patient

Access

Eligibility &

Enrollment

Financial

Counseling

Reg QA &

Eligibility

Estimation

& Patient

Payment

Provider

Coding &

Audit

Clinical Docs

Improvement

Claims Submission

& MonitoringPatient Bills &

Payments

Payment

Automation

Denials/

Appeals

Mgmt

Self-Pay &

A/R Mgmt

Imaging,

Workflow, and

Care Solutions

Value-Based Care Solutions | RCM Services | Physician Group Managed Services | Consulting

RCM Analytics | Data Solutions

Missed Charges

/ Coverage

Under-

payment

Audits


Questions?

Compare your denial rate to peers. Visit the Revenue Cycle Index

at myhealthyhospital.com

THE DENIALS CHALLENGE - Becker's Hospital Review HC...THE DENIALS CHALLENGE PROPRIETARY &...

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